Five-Quarter: “Win-Winning” Solution from Coal

One of the UK's most exciting unconventional gas projects involves drilling into rocks deep below the North Sea. Using a process called “Deep Gas Winning”, Five-Quarter Energy Holdings Ltd. plans to extract gas from what was once thought to be the dirtiest fuel: coal.

Five-Quarter CEO Dr Harry Bradbury might convince you otherwise. A geologist by training who has taught at Cambridge and Yale Universities with three start-ups under his belt, he says his latest endeavour came about in part because he and his wife bought a home in the north of England. After making contact with the University of Newcastle, he became a professor there and tapped into a great source of inspiration.

Newcastle, he says, has a 400 year history of involvement with traditional coal mining, but the industry was closed down in the 1970s and 80s. “Much of the repository of knowledge and documentation came to the University of Newcastle and that's been ceded to Five-Quarter, so we started out with a very healthy basis of understanding of everything that's happened up here on coal.”

In talking about the UK's energy needs in the future, he admits that there is much talk of leaving coal behind.

“We're all very aware that the manner in which we've used coal, notably for power generation, has contributed significantly to global warming through the excess greenhouse gases that have been derived,” explains Dr. Bradbury. “But for us, turning your face against that was the wrong starting point; the point we made early on in this was, 'look, what if we could demonstrate that we could still make use of the energy contents of coal, recognising that despite everything that happened since the Industrial Revolution, 75 percent of Britain's coal reserves are still underground, untouched?'

“What if we could actually do something with the energy content that was clever without in any way creating greenhouse gases in the process? Because that's for us a step beyond the current thinking, where people talk about progressively reducing our carbon emissions, but of course the smarter game altogether is carbon use or carbon removal such that we're not actually damaging the environment in the process” he says.

“As you're well aware, the US is going for energy independence largely based on shale gas, but there are not only shales, but coals and other rocks in between, which you can convert directly to gas.”

The question was, recalls Dr. Bradbury, was it possible to extract gas and prospectively create gas without creating an environmental issue? He believes the answer is yes.

In preview of his appearance at Unconventional Gas Aberdeen 2014, which takes place on 25-26 March, Dr Bradbury offered this exclusive interview to Natural Gas Europe.

Dr. Bradbury, could you kindly describe Five-Quarter's “Deep Gas Winning” project?

We've been working on a project that we call “Deep Gas Winning” and the answer to what that is lies in the name: we're looking at deep-seated gas and not at anything that is particularly shallow and therefore problematic in relation to other things like aquifer systems or man's use of the upper layers of the earth.

Secondly, we're talking about a combination of high technology petroleum techniques, notably directional drilling and similar downhole technologies and these are combined with our knowledge base of traditional mining and what you can and can't do in relation to an understanding of the mechanical, thermal or fluid evolution of those kinds of rocks at great depth.

Although, in the UK, as you're aware, most people's involvement so far has been with onshore activities, we know that unlike onshore in the UK, the continental shelf below the North and Irish Seas contains dramatically more natural resource than onshore and obviously we don't suffer from the difficulties of being close to urban communities or usable aquifers or the types of planning concerns that will fall against those that try to do things onshore.

What we're doing with Deep Gas Winning is combining together the extraction of gases that have been there through geological history with the actual creation of gases in certain rock types – notably coals. We can do all of that in a single process without the kind of process that shale and coal-bed methane have, which is more of a hydraulic fracturing process.

In effect we're taking the best of what others would have in shale de-gassing, in coal-bed methane and coal gasification in a single process, without fracking and what that does is create a more diverse gas stream than you get from shale gas or coal-bed methane, where you're looking for predominantly methane.

In our case you have a mixture of methane, CO₂, hydrogen, carbon monoxide and some other things, and the reason why that diversified gas stream is important is, we just happen to be sitting 60 kilometers north of one of Europe's largest chemical and petrochemical clusters in Teesside, and we know that these clusters - Teesside and Grangemouth in the UK as well as their equivalents in Europe – are struggling terribly to find feedstocks at the right kind of cost base to keep them competitive with what's happening in the States.

If you have a diversified stream of gases as we do then it gives you a lot more flexibility to have building blocks such as methanol, hydrogen streams and so on that you can actually use as an indigenous feedstock for the process industries.

How much processing will this involve?

If we were to take it straight out of the ground we can put it directly into the electricity business, but in relation with what we're doing with the chemicals industry sector, we've succeeded in our negotiations with Her Majesty's Treasury. We went to them about a year ago now to ask if our project could form part of the Government's Infrastructure Guarantee Scheme. We asked them if they would consider potential investments at more than 1 billion pounds’ worth where the Government acts as a guarantor of investments. The purpose of that investment is not just to build a sub-surface infrastructure to actually extract the gases, but to build a unique facility at the surface to purify the gases and to separate them out into different fractions for different industries. There is a carbon capture process that is part of that.

We've been successful in reaching this stage with the Treasury and our intention is to build a certain facility that allows us to take that raw gas from underground and to create gas that's separated out for chemicals industries and potentially for the clean fuels industry.

If you can do this successfully, it sounds like the size of this resource would be tremendous. What will be the keys to Five-Quarter's success going forward?

If you look at the assets that are in the ground, those that are in the continental shelf, they are indeed very significant. Were you to take say 2 billion tons of coal and look at the energy content of that, there is more energy in that than has been extracted so far from the totality of our North Sea gas exploitation to date, and if I were to tell you that there's more than 3 trillion tons of coal sitting in the North Sea right now, then obviously getting progressively smarter about how we can access those assets is a real prize for us, because from a national point of view you are looking at a significant part of the total energy coming from those sources when we can get it to scale.

Getting it to scale requires a number of things: one is to produce the kind of surface processing plant we need and we also need to think about how we can go more seaward to make use of current and future infrastructure platforms, notably in the North Sea. Therefore, we are expecting to hold hands with a number of traditional oil and gas players in the further use of those platforms and pipelines, rather than going through too rapid a decommissioning of those such that we no longer have them for use in the future.

Finally, there's a big discussion going on and plans for a new generation of both carbon capture and carbon storage technologies and we have a lot of development in how you therefore combine our gas coming out of the ground, which gives you positive economic value and how you then make use of the same or similar sequences to deposit carbon underground for long-term storage. Sitting in between those two is a new generation of carbon productisation.

There's a lot of work going on in North America and in Europe on how we can get smarter in the use of things like CO₂ in order to create ethical and sustainable products, so the combination of carbon productisation and carbon sequestration is very much part of what we're doing in order to make this process as carbon neutral as possible.

Could you speak a bit about the potential risks and offer how Five-Quarter plans on addressing those?

There has been of course a lot of discussion in the media over shale fracking of late. Although we don't do fracking, there are natural concerns that people have that most of these kinds of new unconventional gas processes are very deep-seated – they're not near-surface processes. Obviously in relation to any form of drilling operation, whether it's traditional oil and gas, mining or unconventional oil and gas, we have to follow through on all of the regulatory requirements that we've been developing for over a decade now in order to ensure that any natural resource exploitation program follows health, safety and environmental regulations.

In relation to what we're doing with Deep Gas Winning, there aren't any extra risks other than you'd have for a normal drilling operation. There's nothing else that is done and no particularly unique locations at which it's done that we'd say are very different.

We are aware that there are some players in the unconventional sector today in various parts of the world involved in underground coal gasification, where people have sought to do that through a process of effectively burning coal underground. We would take exception to that particular sub industry, because by burning coal underground you get a combustion-related product, which is proportionately mostly waste gas rather than economic gases. There could also be environmental concerns resulting from this, especially if it’s being done near surface.

We're not doing that – we're dealing with a sophisticated sub-surface chemistry, which is to do with what's called partial oxidation, for which a very different set of processes are to be followed, with different procedures for the safety and security of the places where you do it, deep underground.

Unlike shale or coal-bed methane, where you have to cover a lot of acreage in order to extract the gas quantity which you want, because in most of those rocks only about 4% of the total volume is actual gas, in our particular case this is a much more intensive harvesting of the gases that are being created from the rock itself, so you don't have to cover a wide acreage to achieve the same energy output and that means that you can be very refined in where you decide to do with this process, without running the risks of natural faults or fractures in the earth.

We don't have significant seismicity in the UK anyway unlike a number of places, despite what happened in the north of England with a water fracking operation taking place.

Each of the founding members of Five-Quarter has spent the last 25 years dealing with environmental issues of one sort or another, so we're using absolute full “bells and whistles” procedures, including the full US EPA procedures for any sort of field activity, running baseline monitoring of all environmental material before and after what we're doing, having real time gas analysis. So we're using every procedure that we know in order to make sure that there shouldn't be any environmental concerns.

Regarding your project, could you share some milestones that you'd like to achieve in 2014?

When you're in the earlier stages of this particular sector it certainly takes a long time to have everyone, including the general public, understand what you're trying to do, why you believe it's important to do it, how to de-risk it and how to make sure it's relevant to everyone, meaning getting it from where it is today to the kind of capacity and output that's meaningful to people generally.

We spend a lot of time with the political community – in our case the regional community – trying to explain what we're doing. Frankly, it hasn't been helped by the difficulties that have arisen in the public relations side of the shale industry.

At the same time, we're really at the cutting edge of renewed regulation. I wouldn't say there was a need for brand new regulation, but clearly this is untried territory from a regulatory point-of-view in trying now to regulate for things like shale and coal and other kinds of source rocks. It isn't something that had been anticipated when the Petroleum Act was drafted some years ago, so there are some regulatory requirements that could take a while longer to complete and there are various local planning issues that could take some time.

Because we're focused on a mixture of the chemicals industry, electricity and fuels, we're obviously addressing the kind of industrial needs that British industry would want. We have groups interested in the world-class scale of gas supplied to them, but obviously it will take time to get to the point where the facilities are in place to get that type of scale.

We still hope that within 2014 we can actually start our pre-commercialisation phase. We've done 8 years' worth of effective feasibility planning, have in place all of our drilling and related communities that are ready to go and should soon have all the finance in place to allow that to happen. We'll have to wait for some further developments in local planning to allow us to get started, but understandably, given that we have the support of Her Majesty's Treasury, they're obviously very keen themselves to see big infrastructure projects roll out quickly. Our commitment to them is, we would start the process of that pre-commercialisation stage in the northeast of England at some point this year with a view to completing it in 2015, after which we would start the build process of the facilities, which will take around 2-3 years.

Drew Leifheit is Natural Gas Europe's New Media Specialist.